Compared to 2010, civil servants’ median salaries at each grade have reduced in real terms between 12% at the most junior levels and 23% at the most senior. This particularly worsened in 2022 due to high rates of inflation.
A two-year public sector pay freeze between 2011 and 2013 was followed by a 1% average cap between 2013 and 2017. 9 Hoddinott S, Fright M and Pope T, ‘Austerity’ in public services: Lessons from the 2010s, Institute for Government, October 2022, https://www.instituteforgovernment.org.uk/publication/report/austerity-public-services-lessons-2010s By 2020/21, civil servants were eligible for pay rises of between 1.5% and 2.5%, with departments left to determine how much to increase pay within that range.
In the 2020 spending review, the chancellor announced another pay freeze for civil servants (excluding those earning under £24,000) in 2021/22.
In March 2022, junior and senior civil servants were offered a pay increase of 2%, with departments having flexibility to pay up to 3% in certain circ*mstances. Pay awards in the wider public sector have been agreed at 4–5% in the case of industrial action, while the private sector has agreed awards over 6%.
The median salary of the civil service, overall, has fallen by 3% since 2010 – less than the median real-terms changes at each individual grade. This is being driven by the increased seniority of the civil service. While it is likely that at least some of this is a genuine change in composition, it is also likely that some civil servants are being promoted to boost their salaries, to stop them from leaving the civil service and to manage morale, rather than because their skill-set and responsibilities demand it. These promotions are likely to be focused in the middle grades, where there are more roles people can be promoted into than at senior levels. And it is harder to promote a junior official in an administrative, operational role because of the different responsibilities at the EO level.
How do pay ranges vary between departments?
Pay at each civil service grade varies between departments:
- The median civil servant at the AO/AA level at MoD earns £20,423, whereas their equivalents in the Welsh government earn £24,630, nearly as much as the median executive officer at DCMS.
- Median pay for grade 6/7 Whitehall civil servants varies by over £11,000, from £52,070 at DCMS to £63,468 at the Treasury. This range rises to £16,390 when including the Welsh government.
Differences between salaries at the same grade allow departments some flexibility to set pay to attract and retain talent. However, it can also contribute to the churn of staff at grade 6 and below, who are able and incentivised to ‘job hop’ in search of higher salaries.
Who sets civil service pay and how?
Pay for senior civil servants is set in a similar way to much of the public sector. The review body on senior salaries (SSRB) gathers evidence and advises the government each year. Ultimately, the government decides whether to accept or amend the SSRB’s recommendation.
The pay of all other civil servants is set differently – without the input of a pay review body. Civil servants in HM Treasury and the Cabinet Office advise ministers, who then agree annual pay remit guidance. 10 Cabinet Office, Civil Service Pay Remit guidance, 2022 to 2023, 31 March 2022, https://www.gov.uk/government/publications/civil-service-pay-remit-guidance-2022-to-2023 This guidance acts as a framework within which departments are able to set their own pay policy. Departments have the flexibility to pay awards higher than the overall limit, but within an agreed cap, where they can justify the need to do so and secure the approval of the Treasury. For example, the current guidance allows departments to pay up to 2% increases, with flexibility to pay a further 1% in some cases.
Bonuses (known as non-consolidated performance payments) are awarded annually to staff based on their performance at an individual, team or organisational level. Previous IfG research has found that current civil service bonuses have little impact on performance or motivation.
